Tuesday, October 30, 2012

The New York Times is reporting that the judge in the Trayvon Martin murder case on Monday denied a prosecution request to bar lawyers for George Zimmerman from using a Web site about legal issues, as well as social and traditional news media, to comment about the case. Go here for the full story.

In class we discuss a few cases illustrating improper conduct during depositions. There are many such cases - and some videos - that are useful for this purpose. Unfortunately, the problem does not seem to go away. In part, the problem continues because by their very nature depositions are conducted away from the scrutiny of the court and many lawyers think that they can get away with being overly aggressive and insulting. I don't know who they are trying to impress; but savy lawyers know how to counter those tactics. Earlier this year, the ABA Journal reported on a case in New York where an attorney was imposed a $10,000 sanction for his behavior at a deposition. See here, here and here. The lawyer was also ordered to pay for the attorney's fees for the costs of pursuing the sanctions motion. As reported yesterday, this bill came out to a little over $36,000. So, over $46,000 out of your own pocket for being obnoxious and not knowing how to behave during a deposition should make you want to think twice about learning how to defend a deposition properly...

The Legal Profession blog is reporting today (here) on a recent case in which an attorney was disbarred for, among other things, beating up a "defenseless client" with a baseball bat causing severe injuries. The court agreed with the Hearing Panel that "causing such injuries to his client constituted a violation of Mr. Robinson’s duty to his client." The opinion is available here.

So, just to be clear, you have a fiduciary duty to not beat up your client with a baseball bat!

All kidding aside, I wonder what the client did that made the lawyer lose it to the point of wanting to beat him up with the bat. According to this article, the attorney claimed that the client broke into the lawyer's home but those charges were dismissed.

Now, let's assume that a client breaks into a lawyer's home and threatens the lawyer or the lawyer's family. Should the lawyer be disciplined for taking action to defend his life or his family? I guess it is all a matter of degree. Just a few days ago there were reports of a recent case from a jurisdiction that recognizes the right of a homeowner to use deadly force to defend his home. See here and here.

Thursday, October 25, 2012

Back in August I posted a story about the lawsuit filed by 3M Corporation against the law firm Covington & Burling (here) for an alleged violation of its fiduciary duties to 3M, and about two weeks ago I commented on the fact that Covington was disqualified in the underlying case that gave rise to the allegation. In that case, Covington was representing the state of Minnesota against 3M who was a former client. The court found that the current representation was substantially related to the former representation of 3M and granted the motion to disqualify. See here.

Now comes news that Covington and the state of Minnesota have appealed the disqualification order.

In its notice to appeal (available here), Covington (represented by different counsel) argues that the lower court erred because none of 3M's confidential information was "known to or used by" Covington lawyers representing the state of Minnesota and that the firm currently has a screen in place to prevent the attorneys who had represented 3M in the past from communicating with the lawyers who were currently representing Minnesota against 3M.

Covington may have a good argument in support of its position, but it is none of these.

In the order to disqualify, the court explained the analysis followed by courts in the state to decide these types of cases. It is possible the judge was wrong about that, but since -to my knowledge - no one has made that argument I will assume that this is correct. The Minnesota Supreme Court has established a three-part test to determine whether an attorney may represent a client in an action against the attorney's former client: (1) first determine if the two representations are substantially related; (2) if so, it is presumed, irrebuttably, that the attorney received confidences from the former client and it is also presumed, but subject to rebuttal, that these confidences were conveyed to the attorney's affiliates; (3) once the presumptions are applied and a decision has been reached as to whether the conflict should result in disqualification, the court may consider other "competing equities" such as the effect of the disqualification on the party that loses its representation.

From what I have seen/read about the case at this point, it seems to me Covington is on the losing end of the first two parts of the analysis, but may have something to say on the last one.

For purposes of Rule 1.9, matters are “substantially related” if there is a “substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.” It is possible Covington may want to argue that the two representations were not substantially related, but the disqualification order makes a good case for its conclusion that they are. And, more importantly, once the court has concluded that representations are substantially related, Covington cannot argue (as it is now trying to do) there there is no evidence that its lawyers have used or disclosed confidential information. Covington wants to argue that the court "ignored critical elements of the rule" - meaning rule 1.9 about former client conflicts of interest - and that the court erred because it failed to address whether the firm used or disclosed confidential information.

This argument is weak. As stated above, once the court concludes the former representation and the current representation are substantially related, it is presumed (irrebuttably) that information was acquired and also - subject to rebuttal - that it was shared. The firm would have to prove that the confidential information was not and could not have been shared in the past and that it will not be possible to share it in the future by proving the use of timely and effective "institutional mechanisms" (usually called "screens") created for that purpose.

In its notice to appeal, Covington claims the firm "currently" has a screen in place. However, since the rules require that the screen has to be "timely", a screen that is allegedly in place now may not be sufficient to solve the problem "back then".

The problem is it is not clear when that screen was implemented, since in its order to disqualify the firm the judge concluded that there was no screen in place. In fact, the judge stated that "Covington admits to not imposing screens or other protections to safeguard 3M’s information. Covington also admits to not taking any measures to prevent Covington lawyers from sharing confidential information with others in the firm." Given these conclusions, applying the two presumption analysis, the court correctly concluded that it must be presumed that Covington received and shared 3M’s confidential information. If the judge is correct that Covington admitted not having a screen back then, the fact that it has one now is irrelevant.

For these reasons, it seems to me Covington will have a tough time arguing its case.

Covington's better argument, it seems to me, is based on the third part of the test mentioned before.

3M filed its motion to disqualify more than a year into the litigation of the case and claimed that it was not until then that it had noticed the conflict because of a change in its management. The story is plausible, but not necessarily enough to defeat the argument that a disqualification that far into the litigation would cause an undue burden on the party that all of a sudden loses its representation.

So, bottom line, it seems to me the case will come down to this: what is more important?, the fact that Covington seems to have been operating under a conflict or the fact that eliminating the conflict now would cause an undue burden on the party that loses its lawyer.

If it is the former, the order should be affirmed and Covington would be disqualified; if it is the latter, the order should be reversed and Covington would be allowed to continue its representation of the state against its former client.

Monday, October 22, 2012

Mike Frisch (Georgetown) has strong words about a recent report in Washington DC, which he calls "the worst hearing committee report in DC Bar history." You need to read the full comment here to get see why. In a nutshell, the report exonerates four attorneys on charges of conflicts of interest and
dishonesty in a case involving the alleged abuse and manipulation of an
elderly woman even though the evidence supported the conclusion that the attorneys, in
the course of representing the woman's son, purported to represent her
as well and caused her to execute a series of documents giving control
or complete ownership of her property to him. Professor Frisch is concerned (to say the least) about the consequences of the opinion: it makes it nearly
impossible to prosecute lawyer elder abuse and discourages other victims from coming forward.

Back in March I posted a comment on a case in Texas in which a judge was under investigation for misconduct when he was a prosecutor. My original post, which includes a segment from the tv show 60 minutes on the case, is available here. Today, Professor Jonathan Turley published his own comment on the case here.

In class I am often asked if a lawyer violates the rule that says lawyers can't provide financial assistance to clients if the lawyer takes a client to lunch and pays the bill. Well, it turns out that the question may be a non-issue since firms may be charging the clients for those lunches after all... In a short article today, the Wall Street Journal law blog discusses the issue (here). It starts: "Here’s a tip for law firms who want to keep clients happy: Don’t buy them fancy lunches with their own money. . . . [Clients are] fighting over line items such as photocopies and food, and
pushing back hard on charges for pricey legal research databases such as
Westlaw and LexisNexis. Their position: many of these costs are law
firm overhead, and so shouldn’t be passed on to the client in the first
place."

Thursday, October 11, 2012

Back in August I posted a story about the lawsuit filed by 3M Corporation against the law firm Covington & Burling arguing that the law firm violated its duties to 3M when it allegedly dropped 3M in one matter to accept representation of another client (the state of Minnesota) against 3M. Go here for that original post.

Meanwhile, 3M also filed a motion to disqualify Covington from representing the State of Minnesota in the underlying case and today the court has granted the motion to disqualify. Interestingly, however, the basis for the ruling is not that Covington violated the "hot potato doctrine" (which penalizes a firm for dropping a client to clear the way to accept the representation of a new client) as argued by 3M. The court simply held that Covington violated rule 1.9 on successive conflicts of interest. Either way, 3M has scored a big win.

It remains to be seen what effect the disqualification order will have on the civil claim, but I am sure 3M will try to get some mileage out of the strong language by the judge who concluded that “Covington has exhibited a conscious disregard for its duties of confidentiality, candor, full disclosure, and loyalty to 3M..."

Interestingly, in disqualifying Covington, the judge goes into two different types of analysis used in cases of former client conflicts.

According to Rule 1.9, "[a] lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing."

Thus, the big question is whether the previous representation of 3M was substantially related to the current representation of the state. If so, Covington would be prevented from continuing to represent the state. Following the generally accepted analysis in similar cases, the judge stated that matters are “substantially related” if there is a “substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.”

To address the issue, the judge examined the character and content of the previous representation of 3M and concluded that Covington had represented 3M in the past in matters that were substantially related to the case in which it was now representing the State of Minnesota against 3M. The judge therefore concluded that "Covington has “switched sides” by representing a client who is now suing its former client" and that "[b]y representing the State, Covington will benefit by contradicting the very positions it had long advocated on 3M’s behalf." The judge, thus, concluded that "[b]ecause a lawyer may not use any information “relating to” a prior representation to the detriment of a former client, disqualification is necessary where an attorney provided legal services to a former client relative to matters substantially related to the subject matter of the present suit."

Once this conclusion is reached, typically a court would have enough reason to justify disqualifying a firm, unless the firm (and its client) could convince that there are other reasons that show disqualification would be too onerous on the client at that point. Covington may have an argument along those lines because 3M waited so long to protest its representation of the state. I expect Covington to argue that on appeal.

But the judge did not stop there because the case law in the state of Minnesota appears to be slightly different from that in other states.

It appears that the analysis used by courts in Minnesota combines the previously mentioned analysis related to whether the cases are substantially related with the analysis typically used for cases in which the conflict is created by a lawyer who moves from one firm to a new firm. In a case like that, there is a presumption that the moving lawyer acquired confidential information about his or her former clients (left behind in the old firm) (the so-called "first presumption") and that he or she will share (or has shared) that information with the new firm (the "second presumption"). In support of its opposition to a motion to disqualify, the new firm can try to rebut either presumption. If unable to do so, the firm would be disqualified from representing an interest adverse to those of a former client of the new attorney joining the firm.

Using this analysis, the judge also found that Covington should be disqualified. The judge found that the State (and Covington) simply could not rebut the presumption that Covington had received relevant confidential information from 3M nor the presumption that Covington shared that confidential information within the firm because Covington admitted to not imposing screens or other protections to safeguard 3M’s information.

I don't think this second part of the judge's analysis necessarily relevant to the facts of the case (because there was no lawyer moving from one firm to another), but it seems to be part of the analysis used in Minnesota and in the end the result is the same.

As expected, Covington has expressed it disagrees with the court's conclusions. Timothy Hester, chair of Covington’s management committee stated: “The State of Minnesota has been a client of this firm on environmental matters since 1995.We respectfully disagree with the court’s ruling. We believe 3M failed to identify an actual conflict of interest and its attempt to disqualify the firm should in any event be barred because it came 15 months after the case was filed. 3M is a former firm client and the State of Minnesota’s current environmental case against 3M is not substantially related to a food packaging matter that we handled for 3M many years ago. Our client, the State of Minnesota, will be weighing its options, including an immediate appeal.”

Sunday, October 7, 2012

Here is another installment of the on-going series on how not to practice law. In this new case, a lawyer was disbarred for, among other things, stealing money from clients. That's not newsworthy, of course, since that is the typical sanction for misappropriation (although I just posted a story about a case in which the attorney unjustifiably in my opinion, got away with a lesser sanction). What is interesting about this particular case is the explanation given by the lawyer "in his defense."

In response to charges of theft of estate funds, the attorney testified
that he used the funds because he needed them for his business operations in difficult times and that it was all due to "the worst financial crisis in our
nation's history." In other words, he claimed he stole the client's money because the economy was bad and he needed the money. The court said the lawyer's testimony can only be characterized as "a lame attempt to rationalize his theft." I agree. If you think that argument is going to help your case, you better look for another
line of work. Oh, wait!, you do need to look for another line of work
because you just got disbarred!

The Legal Profession blog is reporting on a recent opinion from the Ohio Supreme Court in which an attorney was indefinitely suspended for violations of the Rules
of Professional Conduct in his dealings with more than 20 bankruptcy clients including the fact that the attorney accepted fee advances from those clients but deposited the
unearned fees in his office operating account and spent the clients’ funds on personal and office
expenses without performing the legal services for which he had been
retained. In other words, that he stole client's money.

You would think this is not newsworthy since stealing from clients is essentially the easiest way to get disbarred, right? But that is the strange thing. Here, the attorney was not disbarred. There is a distinction between indefinite suspension (a suspension that can be lifted) and disbarment (which, at least in theory, is permanent).

What made the difference in this case? In imposing an indefinite suspension
rather than permanent disbarment,
the court noted as mitigating factors that the attorney had served
in the U.S. Air Force for 20 years, expressed sincere remorse and
accepted full responsibility for his actions, cooperated with
disciplinary authorities, and was making ongoing attempts to make
restitution to his clients. You can read the opinion here.

I don't understand this. The lawyer has admitted that he stole money from clients in
multiple instances but he doesn't
get disbarred (which the court says is the proper sanction for
misappropriation) because he is a veteran? What does military service
have anything to do with anything? With all due respect to the members
of the military all of whom should be admired for their courage, why
should military service operate as a mitigating factor and not other
kinds of service? What if a lawyer had been a nurse for 20 years before
going to law school, or a high school teacher or a firefighter? How do
we make the distinction?

I just don't think past military service is relevant at all. The lawyer may have served the country admirably for 20 years in the past, but now he was stealing money from clients. He should have been disbarred.

Saturday, October 6, 2012

Just when you think you have seen (or heard) it all... Here is a report on something I had not heard before, other than at the movies. Remember that movie The Star Chamber in which Michael Douglas plays a judge who gets together with other judges to decide cases on their own and then impose their own kind of vigilante justice?

Well, here is a report of a case in which the New York State Commission on Judicial Conduct accepted a 122 page stipulation that resulted in the resignation of a judge. Among other things, it was determined that the judge found a defendant guilty without a plea or trial and imposed sentence without giving the defendant an opportunity to contest charges. I have to say, I don't think I had heard of a judge doing that before.

Friday, October 5, 2012

Lowering the Bar (here) and Prof. Jonathan Turley (here) are reporting today on a story about a New Orleans prosecutor who recently resigned after he dropped some marijuana out of his pocket in the middle of court in front of a police officer. In this case, the incident cost the prosecutor his job. Should he be disciplined too? If so, what sanction would you impose?

These questions raise the issue of whether violating the law, in and of itself, regardless of what the law is, is a punishable offense for professional responsibility purposes. There has always been some debate as to whether courts are consistent when imposing sanctions for illegal conduct. Often, violations of tax laws are treated leniently, while misappropriation (ie, stealing) violations are dealt with harshly. DUIs, sexual misconduct, misdemeanor shoplifting and others are somewhere in between. Part of the analysis has to do with the danger posed to others and whether the "others" involve children or other vulnerable people who are less likely to be able to protect themselves, or whether the illegal conduct involves a so-called "victimless" crime. (It is debatable whether there is such a thing as a "victimless crime", but that is another story.)

I think there is something to say about taking into account the circumstances and the character of the conduct. I do disagree with the cases that impose the lightest of sanctions for illegal conduct, but I don't think that all illegal conduct is of the same character or that disbarment is always the proper sanction. I also think it is important whether the conduct is an isolated incident and whether the person would benefit from counseling or treatment, particularly if it is a case of addiction.

Go here, here and here for three recent examples of cases on the issue of appropriate sanctions for illegal conduct. For many more, click on "sanctions" and scroll down.